Neil Thompson and Stephen McGill discuss the past and the future of Microsoft's console

Xbox 360 has been with us for five years now, and has just seen what its creators hope will be a new lease of life with the release of Kinect.

With that lifecycle expanded, the future of Xbox should be an interesting one, but perhaps one which will contain some unusual turns. To find out just what might be in store, we spoke to Neil Thompson, general manager for UK and Ireland, and UK marketing manager Stephen McGill about the anniversary and Microsoft's plans for the future.

Q:You've just passed the 360's fifth birthday - was there always a plan for the current projected lifespan for the console cycle or has the coming of Kinect extended that beyond your expectations?

Neil Thompson:Well there was always a plan, when we launched the 360 we felt that, through software and services, we were going to keep evolving the platform. So we always thought that would be the secret to how we'd keep the platform fresh and how we'd bring new innovation to consumers.

Obviously, growing out your customer base - we started very much with the core gamer and we still look to deliver a lot of content and services to the core gamer - but we are obviously broadening a lot of the technology and services that we're now offering. We'll just have to see how far that takes us into the future.

Fundamentally it's a software and services game for us. That was our bet when we started off, and fundamentally that's still our bet, even though Kinect is a great hardware device and that's helping us - it's also the software within that that's really the magic source that's going to take us forward.

Q:What about the iterations of the core hardware - have we seen the last of the 360 SKUs now?

Neil Thompson:Who knows? I don't even know that. We've only just revised what the ID was, back in July, so I certainly think that we're going to be with what we have for a while. Customers are demonstrating that they love it - existing customers and new customers. I don't think we'll be in a rush to change a winning formula.

Q:How much was Kinect a response to the success of the Wii and the advent of motion control in the market?

Neil Thompson:I think it's fair to say that Nintendo did a great job of broadening out the gaming industry - I've said it a number of times, they do deserve plaudits for what they've done on that. I think what we were trying to do with Kinect though, was to bring a whole different type of interaction with entertainment, which had never been seen before.

The idea of people not having to have any pieces of plastic in their hands, the idea of people using their whole bodies, using voice control. All of these technical milestones that people have been talking about for the last ten or fifteen years, in terms of general technology, PC technology as well as console technology - that was really the breakthrough that we were looking to achieve.

A lot of the Kinect elements have been in development within Microsoft for many many years. It is fair to say that with the broadening of interactive entertainment and the way that's going, we did then see the opportunity to bring these technologies together and really go after that broadening interactive consumer that we think we can capture.

It's a combination of things, but we're looking to redefine the way that people interact with entertainment - that's really what Kinect is about.

Q:What's the software attach rate been like so far?

Neil Thompson:Very good, but I can't share the numbers with you. To be honest, we're very happy with it. Retailers are telling us they're very happy with it. We think it's a vibrant platform for software. As we go into the next year and beyond, we think the creative juices of developers have really been stirred, and people are talking about some really amazing things coming out. We're feeling very good about where the software is today and where it's going in the future.

Q:And how about the ratio of solus Kinect units sold compared to bundles? Do you know how many people have been buying a 360 purely to use Kinect?

Neil Thompson:Yes I do, but that's not information I want to share! We have a very significant install base, we're going to have a lot of people who want to use Kinect. That's the joy of Kinect - that you can use it with any Xbox. We do have a lot of people who will use it with their existing Xbox.

It is fair to say we're also seeing a lot of new customers coming to the platform as well as customers transitioning into the new form factor of the console - they love it and they think it's a great ID. It's a combination. It's hard to say at the minute because the sales rates are so strong that what we're putting out there is selling through. To give you consumer behaviour flavour is quite hard at the moment because we're selling pretty much everything we're putting out there.

Q:Do you think there'll ever be any peripherals for Kinect?

Neil Thompson:Well, one, not that I know of and two, not that I can think of at this moment. A lot of the idea of Kinect is that you just need you. As people apply their creativity to this, I honestly don't know what the future holds, is my honest answer.

People say, what are the sorts of experiences that you see on Kinect in the future, and I think that they're fairly boundless, given the things I hear back from developers and games publishers. So I don't know is the honest answer, but if you think about what the principle of what Kinect is, it kind of takes most accessories and unneeded peripherals away from that interactive experience.

Q:I wanted to talk briefly about the concept of 360 and MMO. Previously, as I understand it, the barrier to having an MMO on the 360 has been the subscription payment model - does the current trend towards microtransaction models change your position?

Neil Thompson:If I'm honest with you, I'm not super-close to knowing if there would be anything happening on that. Stephen, do you want to say anything?

Stephen McGill:There's nothing that we'll talk about specifically in terms of announcement stuff - I think you're right to point out microtransactions, some of the more casual games... People think about MMOs, they tend to think about hardcore adventure type games from a PC background. I'm not sure that that sort of future on Xbox is the right one or not.

I'm a hardcore gamer and I love those sort of games and I know my friends who are more social gamers probably wouldn't play those games, whether they were on Xbox or not. So I think you've got to look at who the audiences are on different platforms and make sure you've got the right games for those players. Having social experiences, maybe that a few people can get involved in - absolutely.

Q:Perhaps something along the lines of PlayStation Home?

Stephen McGill:That's not something that we're looking at. I'm not sure what their learnings are from the Home experience, it's a nice chat room I guess, not an awful lot more.

Neil Thompson: I think that the honest answer is that, online we're following our own agenda. It's been pretty successful for us over the last four or five years. I think we're focusing on what we think we can drive and that's where our energies are going to go.

Q: Do think it's possible to introduce large-scale, exclusive IP along the lines of Forza, Gears of War or Fable at this stage in a console's life-cycle?

Neil Thompson:Absolutely - why do you ask the question?

Q:Because it seems that a lot of the current large IP is sequels. There hasn't been a big new exclusive IP for a while.

Neil Thompson:I don't think that there's a barrier. In some ways it gets easier as you're as broad a platform as we are now. Investing in big IP, be they new or second or third iterations of existing ones, is easier when you know you have a bigger base. It's harder when you're first launching a console because you have to make a bigger investment.

Stephen McGill:Obviously we're not going to announce any third-party products on their behalf, but one that we've announced, that we're going to be developing with Crytek, is Kingdoms. That's a brand new IP that has a really good future next year.

Neil Thompson:Yeah - I'd also say - we were chatting to someone earlier and they asked the question, what had we learned over the last five years on this journey we've been on. One of the things we've learned is - you need great content. Evolving IP is a part of that journey, and it's a necessity really to being a successful platform holder.

People came to our platform early because of the gaming experiences, we keep offering them the content that they want as well as the customers who maybe want broader content.

Q:Some people have, perhaps inevitably, questioned whether the shortage of Kinect units was managed to stimulate higher demand - is that the case?

Neil Thompson:Anyone who actually works in the business of producing new technology, especially hardware technology, will know that these things are never managed. Everyone else loves to think that they're managed, but they will know it's not. It's a function of coming to market with a brand new innovation and you have to scale up.

The choices you always have are: do we launch in November or do we wait until February, March when we could hit some bigger launch numbers but then we miss Christmas. So you're always in this fine balance, saying 'well, we want to give people the product as soon as we can, but you can't switch on the manufacturing like water.' It takes time to scale.

It's absolutely not a strategy, we want to get the product into consumers hands as quickly as we can because we think its exciting, it's innovative. We wanted to do that for Christmas and that's what we've done. We've built a really strong supply and resupply chain over the coming weeks.

As I said to people at launch, demand is exceptionally strong, and that certainly isn't abating at the moment - we're still seeing strong demand, but there is a lot of product coming into the country now and over the coming weeks.

Stephen McGill:I think another thing to remember is that often consumer electronics companies and games companies have staggered their launches by territory by some quite considerable margins. With Kinect we launched around the world in three weeks. That was a huge task. No region is being penalised.

We're trying to make sure every region has a good amount of stock every week. That can't be underestimated either.

Neil Thompson:That's absolutely right, and when we first launched Xbox originally and the European launch was significantly after the US launch, I was having similar conversations with peers of yours at the time, who would give me a really hard time over them not launching at the same time.

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